Payment Channel Aggregator

This application is the U.S. National Stage of International Application No. PCT/EP2023/080549 filed on Nov. 2, 2023, which claims the benefit of United Kingdom Patent Application No. GB2217487.4, filed on Nov. 23, 2022, the contents of which are all incorporated herein by reference in their entireties.

The present disclosure relates to methods of facilitating a plurality of respective payments between a plurality of respective first parties and a second party.

A blockchain refers to a form of distributed data structure, wherein a duplicate copy of the blockchain is maintained at each of a plurality of nodes in a distributed peer-to-peer (P2P) network (referred to below as a “blockchain network”) and widely publicised. The blockchain comprises a chain of blocks of data, wherein each block comprises one or more transactions. Each transaction, other than so-called “coinbase transactions”, points back to a preceding transaction in a sequence which may span one or more blocks going back to one or more coinbase transactions. Coinbase transactions are discussed further below. Transactions that are submitted to the blockchain network are included in new blocks. New blocks are created by a process often referred to as “mining”, which involves each of a plurality of the nodes competing to perform “proof-of-work”, i.e. solving a cryptographic puzzle based on a representation of a defined set of ordered and validated pending transactions waiting to be included in a new block of the blockchain. It should be noted that the blockchain may be pruned at some nodes, and the publication of blocks can be achieved through the publication of mere block headers.

The transactions in the blockchain may be used for one or more of the following purposes: to convey a digital asset (i.e. a number of digital tokens), to order a set of entries in a virtualised ledger or registry, to receive and process timestamp entries, and/or to time-order index pointers. A blockchain can also be exploited in order to layer additional functionality on top of the blockchain. For example blockchain protocols may allow for storage of additional user data or indexes to data in a transaction. There is no pre-specified limit to the maximum data capacity that can be stored within a single transaction, and therefore increasingly more complex data can be incorporated. For instance this may be used to store an electronic document in the blockchain, or audio or video data.

Nodes of the blockchain network (which are often referred to as “miners”) perform a distributed transaction registration and verification process, which will be described in more detail later. In summary, during this process a node validates transactions and inserts them into a block template for which they attempt to identify a valid proof-of-work solution. Once a valid solution is found, a new block is propagated to other nodes of the network, thus enabling each node to record the new block on the blockchain. In order to have a transaction recorded in the blockchain, a user (e.g. a blockchain client application) sends the transaction to one of the nodes of the network to be propagated. Nodes which receive the transaction may race to find a proof-of-work solution incorporating the validated transaction into a new block. Each node is configured to enforce the same node protocol, which will include one or more conditions for a transaction to be valid. Invalid transactions will not be propagated nor incorporated into blocks. Assuming the transaction is validated and thereby accepted onto the blockchain, then the transaction (including any user data) will thus remain registered and indexed at each of the nodes in the blockchain network as an immutable public record.

The node who successfully solved the proof-of-work puzzle to create the latest block is typically rewarded with a new transaction called the “coinbase transaction” which distributes an amount of the digital asset, i.e. a number of tokens. The detection and rejection of invalid transactions is enforced by the actions of competing nodes who act as agents of the network and are incentivised to report and block malfeasance. The widespread publication of information allows users to continuously audit the performance of nodes. The publication of the mere block headers allows participants to ensure the ongoing integrity of the blockchain.

In an “output-based” model (sometimes referred to as a UTXO-based model), the data structure of a given transaction comprises one or more inputs and one or more outputs. Any spendable output comprises an element specifying an amount of the digital asset that is derivable from the proceeding sequence of transactions. The spendable output is sometimes referred to as a UTXO (“unspent transaction output”). The output may further comprise a locking script specifying a condition for the future redemption of the output. A locking script is a predicate defining the conditions necessary to validate and transfer digital tokens or assets. Each input of a transaction (other than a coinbase transaction) comprises a pointer (i.e. a reference) to such an output in a preceding transaction, and may further comprise an unlocking script for unlocking the locking script of the pointed-to output. So consider a pair of transactions, call them a first and a second transaction (or “target” transaction). The first transaction comprises at least one output specifying an amount of the digital asset, and comprising a locking script defining one or more conditions of unlocking the output. The second, target transaction comprises at least one input, comprising a pointer to the output of the first transaction, and an unlocking script for unlocking the output of the first transaction.

In such a model, when the second, target transaction is sent to the blockchain network to be propagated and recorded in the blockchain, one of the criteria for validity applied at each node will be that the unlocking script meets all of the one or more conditions defined in the locking script of the first transaction. Another will be that the output of the first transaction has not already been redeemed by another, earlier valid transaction. Any node that finds the target transaction invalid according to any of these conditions will not propagate it (as a valid transaction, but possibly to register an invalid transaction) nor include it in a new block to be recorded in the blockchain.

An alternative type of transaction model is an account-based model. In this case each transaction does not define the amount to be transferred by referring back to the UTXO of a preceding transaction in a sequence of past transactions, but rather by reference to an absolute account balance. The current state of all accounts is stored by the nodes separate to the blockchain and is updated constantly.

In a blockchain context, a payment channel is a set of transactions between two parties (where each transaction represents at least one payment) and a corresponding protocol for signing and submitting transactions that allows for a set of valid and secure payments to be made between two parties without committing the entire set of transactions to the blockchain. Of the set of transactions of the payment channel, only two transactions are submitted to the blockchain, regardless of the number of transactions created. One of these submitted transactions is representative of the final agreed-upon payment at the end of an iterative negotiation, or it could be the summation of a set of periodic payments.

For the latter, one may consider the example of a one-year subscription (e.g. to a streaming platform such as Netflix) comprising twelve monthly payments. For each month, a copy of a valid and secure transaction is given to the streaming platform by the customer. The streaming platform can submit the transaction to the blockchain if they so desire. Each month's transaction contains a payment that is the accumulation of the amounts owed for the current and previous months. However, the streaming platform only submits the final transaction to the blockchain. This transaction contains the accumulated payments for the entire twelve months.

Usually, the expectation is that the payment channel is established between the two parties, the payer (e.g. Alice), and the intended recipient of the payment (e.g. Bob), where Bob would be the provider of goods/services. However, as recognised herein, in some circumstances, an intermediary may be desired.

obtaining a respective channel opening transaction, the respective channel opening transaction comprises a respective input signed by the respective first party, and a respective output locked to a respective public key of the respective first party and a public key of the intermediate party, wherein the respective output locks a respective maximum value; obtaining one or more respective channel closing transactions including a respective final channel closing transaction, wherein the respective final channel closing transaction comprises a respective input that references the respective output of the respective channel opening transaction and comprises a respective signature of the respective first party and a signature of the intermediate party, and a respective first output locked to a respective public key of the respective first party and a respective second output locked to a public key of the intermediate party, wherein the respective first output locks a respective first amount of the respective maximum value, and wherein the respective second output locks a respective second amount of the respective maximum value; and executing a respective payment channel between each respective first party and the intermediate party, wherein executing the respective payment channel comprises: generating a payment transaction, wherein the payment transaction comprises a plurality of respective inputs, each respective input references a respective second output of a respective final channel closing transaction and comprising a signature of the intermediate party, and an output locked to a public key of the second party, wherein the output locks a value based on a total of the respective second amounts locked by the respective second outputs. According to one aspect disclosed herein, there is provided a computer-implemented method of facilitating a plurality of respective payments between a plurality of respective first parties and a second party, wherein the method is performed by an intermediate party and comprises:

In this aspect, an intermediary is used to facilitate payments between multiple payers and a payee. The intermediary establishes a payment channel with each payer. Upon each payment channel being closed (i.e. settled), the intermediary submits a payment transaction to the blockchain which transfers an amount to the payee based on the outcome of each separate payment channel.

This intermediary (e.g. Ivan) receives payments from the multiple payers (e.g. multiple instances of Alice) on behalf of the payee (e.g. Bob), then makes a payment to Bob. As an example, a streaming platform may outsource collection of its subscription fees to a third-party collection agency. This agency collects all subscription fees then pays the accumulated fees to the platform in one or more payments. This is a more efficient process than each user having to engage separately with the streaming platform.

obtaining a funding transaction generated by the second party, wherein the funding transaction comprises an input comprising a signature of the second party, and an output locked to a public key of the intermediate party, wherein the output locks an amount at least equal to a total of a plurality of respective maximum values; and obtaining a respective channel opening transaction, the respective channel opening transaction comprises a respective input signed by the intermediate party, and a respective output locked to a respective public key of the respective first party and a public key of the intermediate party, wherein the respective output locks a respective maximum value; obtaining one or more respective channel closing transactions including a respective final channel closing transaction, wherein the respective final channel closing transaction comprises a respective input that references the respective output of the respective channel opening transaction and comprises a respective signature of the respective first party and a signature of the intermediate party, and a respective first output locked to a respective public key of the respective first party and a respective second output locked to a public key of the intermediate party, wherein the respective first output locks a respective first amount of the respective maximum value, and wherein the respective second output locks a respective second amount of the respective maximum value. executing a respective payment channel between each respective first party and the intermediate party, wherein executing the respective payment channel comprises: According to another aspect disclosed herein, there is provided a computer-implemented method of facilitating a plurality of respective payments between a plurality of respective first parties and a second party, wherein the method is performed by an intermediate party and comprises:

In this aspect, an intermediary is used to facilitate payments between a payer and multiple payees. The intermediary receives funding transaction from the payer which sends an amount to the intermediary. The intermediary then establishes a payment channel with each payee. The intermediary closes (i.e. settles) the payment channels with each payee, e.g. after an agreed-upon amount of payments, after an agreed-upon amount of time, in response to a request from the payer, etc.

In this scenario, a party (e.g. Alice) may subscribe to multiple services (e.g. multiple instances of Bob), in which case it is more convenient (and efficient) to have an intermediary disperse these payments to the various services on his/her behalf.

In both aspects, the use of an intermediary increases the privacy of the parties (payer(s) and payee(s)) as, from an outside perspective, a third party cannot determine both the source and destination of the payments, since either the source or destination is replaced by the intermediary.

1 FIG. 100 150 100 101 101 104 106 101 104 104 104 shows an example systemfor implementing a blockchain. The systemmay comprise a packet-switched network, typically a wide-area internetwork such as the Internet. The packet-switched networkcomprises a plurality of blockchain nodesthat may be arranged to form a peer-to-peer (P2P) networkwithin the packet-switched network. Whilst not illustrated, the blockchain nodesmay be arranged as a near-complete graph. Each blockchain nodeis therefore highly connected to other blockchain nodes.

104 104 104 Each blockchain nodecomprises computer equipment of a peer, with different ones of the nodesbelonging to different peers. Each blockchain nodecomprises processing apparatus comprising one or more processors, e.g. one or more central processing units (CPUs), accelerator processors, application specific processors and/or field programmable gate arrays (FPGAs), and other equipment such as application specific integrated circuits (ASICs). Each node also comprises memory, i.e. computer-readable storage in the form of a non-transitory computer-readable medium or media. The memory may comprise one or more memory units employing one or more memory media, e.g. a magnetic medium such as a hard disk; an electronic medium such as a solid-state drive (SSD), flash memory or EEPROM; and/or an optical medium such as an optical disk drive.

150 151 150 104 106 150 150 150 150 151 151 152 152 103 152 The blockchaincomprises a chain of blocks of data, wherein a respective copy of the blockchainis maintained at each of a plurality of blockchain nodesin the distributed or blockchain network. As mentioned above, maintaining a copy of the blockchaindoes not necessarily mean storing the blockchainin full. Instead, the blockchainmay be pruned of data so long as each blockchain nodestores the block header (discussed below) of each block. Each blockin the chain comprises one or more transactions, wherein a transaction in this context refers to a kind of data structure. The nature of the data structure will depend on the type of transaction protocol used as part of a transaction model or scheme. A given blockchain will use one particular transaction protocol throughout. In one common type of transaction protocol, the data structure of each transactioncomprises at least one input and at least one output. Each output specifies an amount representing a quantity of a digital asset as property, an example of which is a userto whom the output is cryptographically locked (requiring a signature or other solution of that user in order to be unlocked and thereby redeemed or spent). Each input points back to the output of a preceding transaction, thereby linking the transactions.

151 155 151 151 152 152 151 153 152 150 153 Each blockalso comprises a block pointerpointing back to the previously created blockin the chain so as to define a sequential order to the blocks. Each transaction(other than a coinbase transaction) comprises a pointer back to a previous transaction so as to define an order to sequences of transactions (N.B. sequences of transactionsare allowed to branch). The chain of blocksgoes all the way back to a genesis block (Gb)which was the first block in the chain. One or more original transactionsearly on in the chainpointed to the genesis blockrather than a preceding transaction.

104 152 104 152 106 104 151 150 104 154 152 151 154 104 104 Each of the blockchain nodesis configured to forward transactionsto other blockchain nodes, and thereby cause transactionsto be propagated throughout the network. Each blockchain nodeis configured to create blocksand to store a respective copy of the same blockchainin their respective memory. Each blockchain nodealso maintains an ordered set (or “pool”)of transactionswaiting to be incorporated into blocks. The ordered poolis often referred to as a “mempool”. This term herein is not intended to limit to any particular blockchain, protocol or model. It refers to the ordered set of transactions which a nodehas accepted as valid and for which the nodeis obliged not to accept any other transactions attempting to spend the same output.

152 152 152 154 151 152 152 106 152 152 152 152 j i j i j i i j i In a given present transaction, the (or each) input comprises a pointer referencing the output of a preceding transactionin the sequence of transactions, specifying that this output is to be redeemed or “spent” in the present transaction. Spending or redeeming does not necessarily imply transfer of a financial asset, though that is certainly one common application. More generally spending could be described as consuming the output, or assigning it to one or more outputs in another, onward transaction. In general, the preceding transaction could be any transaction in the ordered setor any block. The preceding transactionneed not necessarily exist at the time the present transactionis created or even sent to the network, though the preceding transactionwill need to exist and be validated in order for the present transaction to be valid. Hence “preceding” herein refers to a predecessor in a logical sequence linked by pointers, not necessarily the time of creation or sending in a temporal sequence, and hence it does not necessarily exclude that the transactions,be created or sent out-of-order (see discussion below on orphan transactions). The preceding transactioncould equally be called the antecedent or predecessor transaction.

152 103 152 152 103 152 152 103 152 152 103 j a i j b j i b j a The input of the present transactionalso comprises the input authorisation, for example the signature of the userto whom the output of the preceding transactionis locked. In turn, the output of the present transactioncan be cryptographically locked to a new user or entity. The present transactioncan thus transfer the amount defined in the input of the preceding transactionto the new user or entityas defined in the output of the present transaction. In some cases a transactionmay have multiple outputs to split the input amount between multiple users or entities (one of whom could be the original user or entityin order to give change). In some cases a transaction can also have multiple inputs to gather together the amounts from multiple outputs of one or more preceding transactions, and redistribute to one or more outputs of the current transaction.

103 152 102 104 106 103 152 104 104 104 104 152 152 152 103 152 152 152 152 152 152 104 104 106 104 152 104 104 j j j i j i j i i j j According to an output-based transaction protocol such as bitcoin, when a party, such as an individual user or an organization, wishes to enact a new transaction(either manually or by an automated process employed by the party), then the enacting party sends the new transaction from its computer terminalto a recipient. The enacting party or the recipient will eventually send this transaction to one or more of the blockchain nodesof the network(which nowadays are typically servers or data centres, but could in principle be other user terminals). It is also not excluded that the partyenacting the new transactioncould send the transaction directly to one or more of the blockchain nodesand, in some examples, not to the recipient. A blockchain nodethat receives a transaction checks whether the transaction is valid according to a blockchain node protocol which is applied at each of the blockchain nodes. The blockchain node protocol typically requires the blockchain nodeto check that a cryptographic signature in the new transactionmatches the expected signature, which depends on the previous transactionin an ordered sequence of transactions. In such an output-based transaction protocol, this may comprise checking that the cryptographic signature or other authorisation of the partyincluded in the input of the new transactionmatches a condition defined in the output of the preceding transactionwhich the new transaction spends (or “assigns”), wherein this condition typically comprises at least checking that the cryptographic signature or other authorisation in the input of the new transactionunlocks the output of the previous transactionto which the input of the new transaction is linked to. The condition may be at least partially defined by a script included in the output of the preceding transaction. Alternatively it could simply be fixed by the blockchain node protocol alone, or it could be due to a combination of these. Either way, if the new transactionis valid, the blockchain nodeforwards it to one or more other blockchain nodesin the blockchain network. These other blockchain nodesapply the same test according to the same blockchain node protocol, and so forward the new transactionon to one or more further nodes, and so forth. In this way the new transaction is propagated throughout the network of blockchain nodes.

152 152 152 150 j i j In an output-based model, the definition of whether a given output (e.g. UTXO) is assigned (or “spent”) is whether it has yet been validly redeemed by the input of another, onward transactionaccording to the blockchain node protocol. Another condition for a transaction to be valid is that the output of the preceding transactionwhich it attempts to redeem has not already been redeemed by another transaction. Again if not valid, the transactionwill not be propagated (unless flagged as invalid and propagated for alerting) or recorded in the blockchain. This guards against double-spending whereby the transactor tries to assign the output of the same transaction more than once. An account-based model on the other hand guards against double-spending by maintaining an account balance. Because again there is a defined order of transactions, the account balance has a single defined state at any one time.

104 104 154 151 150 151 152 154 154 104 In addition to validating transactions, blockchain nodesalso race to be the first to create blocks of transactions in a process commonly referred to as mining, which is supported by “proof-of-work”. At a blockchain node, new transactions are added to an ordered poolof valid transactions that have not yet appeared in a blockrecorded on the blockchain. The blockchain nodes then race to assemble a new valid blockof transactionsfrom the ordered set of transactionsby attempting to solve a cryptographic puzzle. Typically this comprises searching for a “nonce” value such that when the nonce is concatenated with a representation of the ordered pool of pending transactionsand hashed, then the output of the hash meets a predetermined condition. E.g. the predetermined condition may be that the output of the hash has a certain predefined number of leading zeros. Note that this is just one particular type of proof-of-work puzzle, and other types are not excluded. A property of a hash function is that it has an unpredictable output with respect to its input. Therefore this search can only be performed by brute force, thus consuming a substantive amount of processing resource at each blockchain nodethat is trying to solve the puzzle.

104 106 104 104 154 151 150 104 155 151 151 1 104 151 104 106 155 151 152 104 106 n n The first blockchain nodeto solve the puzzle announces this to the network, providing the solution as proof which can then be easily checked by the other blockchain nodesin the network (once given the solution to a hash it is straightforward to check that it causes the output of the hash to meet the condition). The first blockchain nodepropagates a block to a threshold consensus of other nodes that accept the block and thus enforce the protocol rules. The ordered set of transactionsthen becomes recorded as a new blockin the blockchainby each of the blockchain nodes. A block pointeris also assigned to the new blockpointing back to the previously created block-in the chain. The significant amount of effort, for example in the form of hash, required to create a proof-of-work solution signals the intent of the first nodeto follow the rules of the blockchain protocol. Such rules include not accepting a transaction as valid if it spends or assigns the same output as a previously validated transaction, otherwise known as double-spending. Once created, the blockcannot be modified since it is recognized and maintained at each of the blockchain nodesin the blockchain network. The block pointeralso imposes a sequential order to the blocks. Since the transactionsare recorded in the ordered blocks at each blockchain nodein a network, this therefore provides an immutable public ledger of the transactions.

104 154 152 151 154 104 154 104 104 150 n Note that different blockchain nodesracing to solve the puzzle at any given time may be doing so based on different snapshots of the pool of yet-to-be published transactionsat any given time, depending on when they started searching for a solution or the order in which the transactions were received. Whoever solves their respective puzzle first defines which transactionsare included in the next new blockand in which order, and the current poolof unpublished transactions is updated. The blockchain nodesthen continue to race to create a block from the newly-defined ordered pool of unpublished transactions, and so forth. A protocol also exists for resolving any “fork” that may arise, which is where two blockchain nodessolve their puzzle within a very short time of one another such that a conflicting view of the blockchain gets propagated between nodes. In short, whichever prong of the fork grows the longest becomes the definitive blockchain. Note this should not affect the users or agents of the network as the same transactions will appear in both forks.

104 151 152 104 151 n n According to the bitcoin blockchain (and most other blockchains) a node that successfully constructs a new blockis granted the ability to newly assign an additional, accepted amount of the digital asset in a new special kind of transaction which distributes an additional defined quantity of the digital asset (as opposed to an inter-agent, or inter-user transaction which transfers an amount of the digital asset from one agent or user to another). This special type of transaction is usually referred to as a “coinbase transaction”, but may also be termed an “initiation transaction” or “generation transaction”. It typically forms the first transaction of the new block. The proof-of-work signals the intent of the node that constructs the new block to follow the protocol rules allowing this special transaction to be redeemed later. The blockchain protocol rules may require a maturity period, for example 100 blocks, before this special transaction may be redeemed. Often a regular (non-generation) transactionwill also specify an additional transaction fee in one of its outputs, to further reward the blockchain nodethat created the blockin which that transaction was published. This fee is normally referred to as the “transaction fee”, and is discussed blow.

104 104 Due to the resources involved in transaction validation and publication, typically at least each of the blockchain nodestakes the form of a server comprising one or more physical server units, or even whole a data centre. However in principle any given blockchain nodecould take the form of a user terminal or a group of user terminals networked together.

104 104 152 104 The memory of each blockchain nodestores software configured to run on the processing apparatus of the blockchain nodein order to perform its respective role or roles and handle transactionsin accordance with the blockchain node protocol. It will be understood that any action attributed herein to a blockchain nodemay be performed by the software run on the processing apparatus of the respective computer equipment. The node software may be implemented in one or more applications at the application layer, or a lower layer such as the operating system layer or a protocol layer, or any combination of these.

101 102 103 106 103 150 150 104 Also connected to the networkis the computer equipmentof each of a plurality of partiesin the role of consuming users. These users may interact with the blockchain networkbut do not participate in validating transactions or constructing blocks. Some of these users or agentsmay act as senders and recipients in transactions. Other users may interact with the blockchainwithout necessarily acting as senders or recipients. For instance, some parties may act as storage entities that store a copy of the blockchain(e.g. having obtained a copy of the blockchain from a blockchain node).

103 106 106 104 103 106 150 106 103 102 103 102 103 102 103 102 100 103 103 103 a a b b a b Some or all of the partiesmay be connected as part of a different network, e.g. a network overlaid on top of the blockchain network. Users of the blockchain network (often referred to as “clients”) may be said to be part of a system that includes the blockchain network; however, these users are not blockchain nodesas they do not perform the roles required of the blockchain nodes. Instead, each partymay interact with the blockchain networkand thereby utilize the blockchainby connecting to (i.e. communicating with) a blockchain node. Two partiesand their respective equipmentare shown for illustrative purposes: a first partyand his/her respective computer equipment, and a second partyand his/her respective computer equipment. It will be understood that many more such partiesand their respective computer equipmentmay be present and participating in the system, but for convenience they are not illustrated. Each partymay be an individual or an organization. Purely by way of illustration the first partyis referred to herein as Alice and the second partyis referred to as Bob, but it will be appreciated that this is not limiting and any reference herein to Alice or Bob may be replaced with “first party” and “second “party” respectively.

102 103 102 103 102 103 105 103 102 102 103 102 103 The computer equipmentof each partycomprises respective processing apparatus comprising one or more processors, e.g. one or more CPUs, GPUs, other accelerator processors, application specific processors, and/or FPGAs. The computer equipmentof each partyfurther comprises memory, i.e. computer-readable storage in the form of a non-transitory computer-readable medium or media. This memory may comprise one or more memory units employing one or more memory media, e.g. a magnetic medium such as hard disk; an electronic medium such as an SSD, flash memory or EEPROM; and/or an optical medium such as an optical disc drive. The memory on the computer equipmentof each partystores software comprising a respective instance of at least one client applicationarranged to run on the processing apparatus. It will be understood that any action attributed herein to a given partymay be performed using the software run on the processing apparatus of the respective computer equipment. The computer equipmentof each partycomprises at least one user terminal, e.g. a desktop or laptop computer, a tablet, a smartphone, or a wearable device such as a smartwatch. The computer equipmentof a given partymay also comprise one or more other networked resources, such as cloud computing resources accessed via the user terminal.

105 102 103 The client applicationmay be initially provided to the computer equipmentof any given partyon suitable computer-readable storage medium or media, e.g. downloaded from a server, or provided on a removable storage device such as a removable SSD, flash memory key, removable EEPROM, removable magnetic disk drive, magnetic floppy disk or tape, optical disk such as a CD or DVD ROM, or a removable optical drive, etc.

105 103 152 104 104 150 152 150 The client applicationcomprises at least a “wallet” function. This has two main functionalities. One of these is to enable the respective partyto create, authorise (for example sign) and send transactionsto one or more bitcoin nodesto then be propagated throughout the network of blockchain nodesand thereby included in the blockchain. The other is to report back to the respective party the amount of the digital asset that he or she currently owns. In an output-based system, this second functionality comprises collating the amounts defined in the outputs of the varioustransactions scattered throughout the blockchainthat belong to the party in question.

105 105 Note: whilst the various client functionality may be described as being integrated into a given client application, this is not necessarily limiting and instead any client functionality described herein may instead be implemented in a suite of two or more distinct applications, e.g. interfacing via an API, or one being a plug-in to the other. More generally the client functionality could be implemented at the application layer or a lower layer such as the operating system, or any combination of these. The following will be described in terms of a client applicationbut it will be appreciated that this is not limiting.

105 102 104 106 105 152 106 105 104 150 103 150 150 102 152 104 152 152 106 152 150 104 106 The instance of the client application or softwareon each computer equipmentis operatively coupled to at least one of the blockchain nodesof the network. This enables the wallet function of the clientto send transactionsto the network. The clientis also able to contact blockchain nodesin order to query the blockchainfor any transactions of which the respective partyis the recipient (or indeed inspect other parties' transactions in the blockchain, since in embodiments the blockchainis a public facility which provides trust in transactions in part through its public visibility). The wallet function on each computer equipmentis configured to formulate and send transactionsaccording to a transaction protocol. As set out above, each blockchain noderuns software configured to validate transactionsaccording to the blockchain node protocol, and to forward transactionsin order to propagate them throughout the blockchain network. The transaction protocol and the node protocol correspond to one another, and a given transaction protocol goes with a given node protocol, together implementing a given transaction model. The same transaction protocol is used for all transactionsin the blockchain. The same node protocol is used by all the nodesin the network.

103 152 150 105 152 105 104 104 102 104 152 152 152 j j j When a given party, say Alice, wishes to send a new transactionto be included in the blockchain, then she formulates the new transaction in accordance with the relevant transaction protocol (using the wallet function in her client application). She then sends the transactionfrom the client applicationto one or more blockchain nodesto which she is connected. E.g. this could be the blockchain nodethat is best connected to Alice's computer. When any given blockchain nodereceives a new transaction, it handles it in accordance with the blockchain node protocol and its respective role. This comprises first checking whether the newly received transactionmeets a certain condition for being “valid”, examples of which will be discussed in more detail shortly. In some transaction protocols, the condition for validation may be configurable on a per-transaction basis by scripts included in the transactions. Alternatively the condition could simply be a built-in feature of the node protocol, or be defined by a combination of the script and the node protocol.

152 104 152 152 154 104 104 152 152 104 106 104 152 106 j j j j On condition that the newly received transactionpasses the test for being deemed valid (i.e. on condition that it is “validated”), any blockchain nodethat receives the transactionwill add the new validated transactionto the ordered set of transactionsmaintained at that blockchain node. Further, any blockchain nodethat receives the transactionwill propagate the validated transactiononward to one or more other blockchain nodesin the network. Since each blockchain nodeapplies the same protocol, then assuming the transactionis valid, this means it will soon be propagated throughout the whole network.

154 104 104 154 152 104 154 151 104 154 152 154 152 151 150 152 j j Once admitted to the ordered pool of pending transactionsmaintained at a given blockchain node, that blockchain nodewill start competing to solve the proof-of-work puzzle on the latest version of their respective pool ofincluding the new transaction(recall that other blockchain nodesmay be trying to solve the puzzle based on a different pool of transactions, but whoever gets there first will define the set of transactions that are included in the latest block. Eventually a blockchain nodewill solve the puzzle for a part of the ordered poolwhich includes Alice's transaction). Once the proof-of-work has been done for the poolincluding the new transaction, it immutably becomes part of one of the blocksin the blockchain. Each transactioncomprises a pointer back to an earlier transaction, so the order of the transactions is also immutably recorded.

104 151 104 104 150 104 151 Different blockchain nodesmay receive different instances of a given transaction first and therefore have conflicting views of which instance is ‘valid’ before one instance is published in a new block, at which point all blockchain nodesagree that the published instance is the only valid instance. If a blockchain nodeaccepts one instance as valid, and then discovers that a second instance has been recorded in the blockchainthen that blockchain nodemust accept this and will discard (i.e. treat as invalid) the instance which it had initially accepted (i.e. the one that has not been published in a block).

An alternative type of transaction protocol operated by some blockchain networks may be referred to as an “account-based” protocol, as part of an account-based transaction model. In the account-based case, each transaction does not define the amount to be transferred by referring back to the UTXO of a preceding transaction in a sequence of past transactions, but rather by reference to an absolute account balance. The current state of all accounts is stored, by the nodes of that network, separate to the blockchain and is updated constantly. In such a system, transactions are ordered using a running transaction tally of the account (also called the “position”). This value is signed by the sender as part of their cryptographic signature and is hashed as part of the transaction reference calculation. In addition, an optional data field may also be signed the transaction. This data field may point back to a previous transaction, for example if the previous transaction ID is included in the data field.

2 FIG. 152 150 151 152 illustrates an example transaction protocol. This is an example of a UTXO-based protocol. A transaction(abbreviated “Tx”) is the fundamental data structure of the blockchain(each blockcomprising one or more transactions). The following will be described by reference to an output-based or “UTXO” based protocol. However, this is not limiting to all possible embodiments. Note that while the example UTXO-based protocol is described with reference to bitcoin, it may equally be implemented on other example blockchain networks.

152 202 203 203 202 201 202 203 201 201 152 104 In a UTXO-based model, each transaction (“Tx”)comprises a data structure comprising one or more inputs, and one or more outputs. Each outputmay comprise an unspent transaction output (UTXO), which can be used as the source for the inputof another new transaction (if the UTXO has not already been redeemed). The UTXO includes a value specifying an amount of a digital asset. This represents a set number of tokens on the distributed ledger. The UTXO may also contain the transaction ID of the transaction from which it came, amongst other information. The transaction data structure may also comprise a header, which may comprise an indicator of the size of the input field(s)and output field(s). The headermay also include an ID of the transaction. In embodiments the transaction ID is the hash of the transaction data (excluding the transaction ID itself) and stored in the headerof the raw transactionsubmitted to the nodes.

103 152 103 152 203 152 152 151 154 203 a j b j i i 2 FIG. 2 FIG. 1 0 0 1 0 1 1 Say Alicewishes to create a transactiontransferring an amount of the digital asset in question to Bob. InAlice's new transactionis labelled “Tx”. It takes an amount of the digital asset that is locked to Alice in the outputof a preceding transactionin the sequence, and transfers at least some of this to Bob. The preceding transactionis labelled “Tx′ in. Txand Txare just arbitrary labels. They do not necessarily mean that Txis the first transaction in the blockchain, nor that Txis the immediate next transaction in the pool. Txcould point back to any preceding (i.e. antecedent) transaction that still has an unspent outputlocked to Alice.

0 1 0 1 0 1 151 150 106 151 154 151 106 106 104 104 The preceding transaction Txmay already have been validated and included in a blockof the blockchainat the time when Alice creates her new transaction Tx, or at least by the time she sends it to the network. It may already have been included in one of the blocksat that time, or it may be still waiting in the ordered setin which case it will soon be included in a new block. Alternatively Txand Txcould be created and sent to the networktogether, or Txcould even be sent after Txif the node protocol allows for buffering “orphan” transactions. The terms “preceding” and “subsequent” as used herein in the context of the sequence of transactions refer to the order of the transactions in the sequence as defined by the transaction pointers specified in the transactions (which transaction points back to which other transaction, and so forth). They could equally be replaced with “predecessor” and “successor”, or “antecedent” and “descendant”, “parent” and “child”, or such like. It does not necessarily imply an order in which they are created, sent to the network, or arrive at any given blockchain node. Nevertheless, a subsequent transaction (the descendent transaction or “child”) which points to a preceding transaction (the antecedent transaction or “parent”) will not be validated until and unless the parent transaction is validated. A child that arrives at a blockchain nodebefore its parent is considered an orphan. It may be discarded or buffered for a certain time to wait for the parent, depending on the node protocol and/or node behaviour.

203 202 0 0 One of the one or more outputsof the preceding transaction Txcomprises a particular UTXO, labelled here UTXO. Each UTXO comprises a value specifying an amount of the digital asset represented by the UTXO, and a locking script which defines a condition which must be met by an unlocking script in the inputof a subsequent transaction in order for the subsequent transaction to be validated, and therefore for the UTXO to be successfully redeemed. Typically the locking script locks the amount to a particular party (the beneficiary of the transaction in which it is included). I.e. the locking script defines an unlocking condition, typically comprising a condition that the unlocking script in the input of the subsequent transaction comprises the cryptographic signature of the party to whom the preceding transaction is locked.

203 202 The locking script (aka scriptPubKey) is a piece of code written in the domain specific language recognized by the node protocol. A particular example of such a language is called “Script” (capital S) which is used by the blockchain network. The locking script specifies what information is required to spend a transaction output, for example the requirement of Alice's signature. Unlocking scripts appear in the outputs of transactions. The unlocking script (aka scriptSig) is a piece of code written the domain specific language that provides the information required to satisfy the locking script criteria. For example, it may contain Bob's signature. Unlocking scripts appear in the inputof transactions.

0 0 A A 0 0 A A 1 1 0 0 1 0 0 0 1 A 203 202 202 202 So in the example illustrated, UTXOin the outputof Txcomprises a locking script [Checksig P] which requires a signature Sig Pof Alice in order for UTXOto be redeemed (strictly, in order for a subsequent transaction attempting to redeem UTXOto be valid). [Checksig P] contains a representation (i.e. a hash) of the public key Pfrom a public-private key pair of Alice. The inputof Txcomprises a pointer pointing back to Tx(e.g. by means of its transaction ID, TxID, which in embodiments is the hash of the whole transaction Tx). The inputof Txcomprises an index identifying UTXOwithin Tx, to identify it amongst any other possible outputs of Tx. The inputof Txfurther comprises an unlocking script <Sig P> which comprises a cryptographic signature of Alice, created by Alice applying her private key from the key pair to a predefined portion of data (sometimes called the “message” in cryptography). The data (or “message”) that needs to be signed by Alice to provide a valid signature may be defined by the locking script, or by the node protocol, or by a combination of these.

1 104 A A A <Sig P> <P>∥[Checksig P] A 0 1 1 where “|” represents a concatenation and “< . . . >” means place the data on the stack, and “[ . . . ]” is a function comprised by the locking script (in this example a stack-based language). Equivalently the scripts may be run one after the other, with a common stack, rather than concatenating the scripts. Either way, when run together, the scripts use the public key Pof Alice, as included in the locking script in the output of Tx, to authenticate that the unlocking script in the input of Txcontains the signature of Alice signing the expected portion of data. The expected portion of data itself (the “message”) also needs to be included in order to perform this authentication. In embodiments the signed data comprises the whole of Tx(so a separate element does not need to be included specifying the signed portion of data in the clear, as it is already inherently present). When the new transaction Txarrives at a blockchain node, the node applies the node protocol. This comprises running the locking script and unlocking script together to check whether the unlocking script meets the condition defined in the locking script (where this condition may comprise one or more criteria). In embodiments this involves concatenating the two scripts:

104 The details of authentication by public-private cryptography will be familiar to a person skilled in the art. Basically, if Alice has signed a message using her private key, then given Alice's public key and the message in the clear, another entity such as a nodeis able to authenticate that the message must have been signed by Alice. Signing typically comprises hashing the message, signing the hash, and tagging this onto the message as a signature, thus enabling any holder of the public key to authenticate the signature. Note therefore that any reference herein to signing a particular piece of data or part of a transaction, or such like, can in embodiments mean signing a hash of that piece of data or part of the transaction.

1 0 1 1 1 1 1 0 0 1 1 0 104 104 154 104 104 106 106 150 203 152 104 150 152 104 203 152 150 If the unlocking script in Txmeets the one or more conditions specified in the locking script of Tx(so in the example shown, if Alice's signature is provided in Txand authenticated), then the blockchain nodedeems Txvalid. This means that the blockchain nodewill add Txto the ordered pool of pending transactions. The blockchain nodewill also forward the transaction Txto one or more other blockchain nodesin the network, so that it will be propagated throughout the network. Once Txhas been validated and included in the blockchain, this defines UTXOfrom Txas spent. Note that Txcan only be valid if it spends an unspent transaction output. If it attempts to spend an output that has already been spent by another transaction, then Txwill be invalid even if all the other conditions are met. Hence the blockchain nodealso needs to check whether the referenced UTXO in the preceding transaction Txis already spent (i.e. whether it has already formed a valid input to another valid transaction). This is one reason why it is important for the blockchainto impose a defined order on the transactions. In practice a given blockchain nodemay maintain a separate database marking which UTXOsin which transactionshave been spent, but ultimately what defines whether a UTXO has been spent is whether it has already formed a valid input to another valid transaction in the blockchain.

203 152 202 151 If the total amount specified in all the outputsof a given transactionis greater than the total amount pointed to by all its inputs, this is another basis for invalidity in most transaction models. Therefore such transactions will not be propagated nor included in a block.

0 0 1 0 1 Note that in UTXO-based transaction models, a given UTXO needs to be spent as a whole. It cannot “leave behind” a fraction of the amount defined in the UTXO as spent while another fraction is spent. However the amount from the UTXO can be split between multiple outputs of the next transaction. E.g. the amount defined in UTXOin Txcan be split between multiple UTXOs in Tx. Hence if Alice does not want to give Bob all of the amount defined in UTXO, she can use the remainder to give herself change in a second output of Tx, or pay another party.

104 104 151 104 150 104 152 203 202 203 152 104 104 203 152 0 0 1 1 1 0 1 1 In practice Alice will also usually need to include a fee for the bitcoin nodethat successfully includes her transactionin a block. If Alice does not include such a fee, Txmay be rejected by the blockchain nodes, and hence although technically valid, may not be propagated and included in the blockchain(the node protocol does not force blockchain nodesto accept transactionsif they don't want). In some protocols, the transaction fee does not require its own separate output(i.e. does not need a separate UTXO). Instead any difference between the total amount pointed to by the input(s)and the total amount of specified in the output(s)of a given transactionis automatically given to the blockchain nodepublishing the transaction. E.g. say a pointer to UTXOis the only input to Tx, and Txhas only one output UTXO. If the amount of the digital asset specified in UTXOis greater than the amount specified in UTXO, then the difference may be assigned (or spent) by the nodethat wins the proof-of-work race to create the block containing UTXO. Alternatively or additionally however, it is not necessarily excluded that a transaction fee could be specified explicitly in its own one of the UTXOsof the transaction.

152 150 103 152 150 150 103 105 150 104 Alice and Bob's digital assets consist of the UTXOs locked to them in any transactionsanywhere in the blockchain. Hence typically, the assets of a given partyare scattered throughout the UTXOs of various transactionsthroughout the blockchain. There is no one number stored anywhere in the blockchainthat defines the total balance of a given party. It is the role of the wallet function in the client applicationto collate together the values of all the various UTXOs which are locked to the respective party and have not yet been spent in another onward transaction. It can do this by querying the copy of the blockchainas stored at any of the bitcoin nodes.

150 Note that the script code is often represented schematically (i.e. not using the exact language). For example, one may use operation codes (opcodes) to represent a particular function. “OP_. . . . ” refers to a particular opcode of the Script language. As an example, OP_RETURN is an opcode of the Script language that when preceded by OP_FALSE at the beginning of a locking script creates an unspendable output of a transaction that can store data within the transaction, and thereby record the data immutably in the blockchain. E.g. the data could comprise a document which it is desired to store in the blockchain.

A Typically an input of a transaction contains a digital signature corresponding to a public key P. In embodiments this is based on the ECDSA using the elliptic curve secp256k1. A digital signature signs a particular piece of data. In some embodiments, for a given transaction the signature will sign part of the transaction input, and some or all of the transaction outputs. The particular parts of the outputs it signs depends on the SIGHASH flag. The SIGHASH flag is usually a 4-byte code included at the end of a signature to select which outputs are signed (and thus fixed at the time of signing).

150 The locking script is sometimes called “scriptPubKey” referring to the fact that it typically comprises the public key of the party to whom the respective transaction is locked. The unlocking script is sometimes called “scriptSig” referring to the fact that it typically supplies the corresponding signature. However, more generally it is not essential in all applications of a blockchainthat the condition for a UTXO to be redeemed comprises authenticating a signature. More generally the scripting language could be used to define any one or more conditions. Hence the more general terms “locking script” and “unlocking script” may be preferred.

1 FIG. 102 120 103 107 103 107 152 106 150 106 107 a b a b As shown in, the client application on each of Alice and Bob's computer equipment,, respectively, may comprise additional communication functionality. This additional functionality enables Aliceto establish a separate side channelwith Bob(at the instigation of either party or a third party). The side channelenables exchange of data separately from the blockchain network. Such communication is sometimes referred to as “off-chain” communication. For instance this may be used to exchange a transactionbetween Alice and Bob without the transaction (yet) being registered onto the blockchain networkor making its way onto the chain, until one of the parties chooses to broadcast it to the network. Sharing a transaction in this way is sometimes referred to as sharing a “transaction template”. A transaction template may lack one or more inputs and/or outputs that are required in order to form a complete transaction. Alternatively or additionally, the side channelmay be used to exchange any other transaction related data, such as keys, negotiated amounts or terms, data content, etc.

107 101 106 301 102 102 107 106 107 107 a b The side channelmay be established via the same packet-switched networkas the blockchain network. Alternatively or additionally, the side channelmay be established via a different network such as a mobile cellular network, or a local area network such as a local wireless network, or even a direct wired or wireless link between Alice and Bob's devices,. Generally, the side channelas referred to anywhere herein may comprise any one or more links via one or more networking technologies or communication media for exchanging data “off-chain”, i.e. separately from the blockchain network. Where more than one link is used, then the bundle or collection of off-chain links as a whole may be referred to as the side channel. Note therefore that if it is said that Alice and Bob exchange certain pieces of information or data, or such like, over the side channel, then this does not necessarily imply all these pieces of data have to be send over exactly the same link or even the same type of network.

150 In a typical payment channel implementation, a nearly unlimited number of payments can be made but it is only ever necessary to add two transactions to the blockchain. In addition to the reduced number of transactions being added to the blockchain and the associated reduced costs, storage and bandwidth usage, payment channels also offer the advantage of speed and the ability of the payers to have their funds refunded if things do not go as planned or either party decides not to proceed beyond a certain set of payments. A description of a payment channel implementation is outlined below.

First Note that

“For each bitcoin transaction, you can have more than one input. For each input, there is a parameter called the sequence number. This number is an indication of whether the transaction that includes this input is finalised or not. If the parameter does not take the maximum value (0xFFFFFFFF), then the validation process will look at the locktime field (defined at the transaction level), which specifies a time when the transaction becomes valid, i.e. a transaction is not valid until the locktime. This can be useful when the time specified is in the future. (The furthest you can choose for locktime is roughly 9,500 years in the future, at the time of writing.) Before the locktime of a given transaction matures, a new version of that transaction, with a larger sequence number, can invalidate the earlier version that spends the same input but with a smaller sequence number.” [nchain.com/payment-channels-and-smart-contracts-on-bitcoin/]

103 103 103 103 103 103 103 103 a b a b a b a b Now consider the scenario where Aliceneeds to pay Bobfor a service where this may require multiple payments from Aliceto Bobover a period of time, as the situation demands. Aliceexpects to spend at most 15 BSV (in total) to Bobin the possible set of exchanges. To facilitate this a payment channel is established between Aliceand Boband operates as follows.

c 103 106 a Alice creates a 2-of-2 multi-signature transaction, Tthat commits 15 BSV originating from Alice. A multi-signature locking script requires that two individuals (Alice and Bob) sign any transaction that spends the corresponding locked output. At this point the transaction is not submitted to blockchain network.

TABLE 1 c Funding transaction T c T Version 1 nLockTime 0 In-count 1 Out-count 2 Input List Output list Unlocking Sequence Locking Outpoint script no. Value Script Alice's input A A  Sig   P  4294967295 15 BSV [2-2 multisig Alice Bob]

103 103 103 103 103 103 a a a a a b r,0 r 0 Alicecreates a separate refund transaction, T, returning all the funds from the ‘multi-signature controlled funds’ to Alice. This transaction includes an nLockTime value of s. nLockTime is a blockchain transaction parameter that allows a blockchain transaction to only be executable after a specified time has passed. Bobsigns the blockchain transaction. This refund transaction allows Aliceto be refunded, after nLockTime has transpired, if the exchange between Aliceand Bobgoes awry.

TABLE 2 r, 0 Refund transaction T r, 0 T Version 1 nLockTime r 0 s In-count 1 Out-count 2 Input List Output list Unlocking Sequence Locking Outpoint script no. Value Script c T|| 0 A A B B  Sig   P   Sig   P  1 15 BSV [P2PKH Alice]

103 103 103 103 103 103 103 103 103 103 103 103 103 103 103 106 a a b a b a b a b b a a b b a r,i r,i+1 Alicesigns the original transaction Tc. At this point Aliceand Bobmay proceed to create new refund transactions to reflect the (off-chain) payments being made from Aliceto Bob. These refund transactions would reflect the net sum of money that Aliceis required to pay Bobat that point in time. As an example, if Aliceis to pay Bob5 BSV, a new refund transaction, T, is created that has outputs sending 5 BSV to Boband 10 BSV back to Alice. If Aliceneeds to pay another 5 BSV to Bobthen the new refund transaction, T, is created with outputs sending 10 BSV to Boband 5 BSV to Alice. For each new refund transaction, assuming agreement with the details, both parties sign the transaction but do not necessarily submit the transaction to the network.

TABLE 3 r, 1 Refund transaction T r, 1 T Version 1 nLockTime r 1 s In-count 1 Out-count 2 Input List Output list Unlocking Sequence Locking Outpoint script no. Value Script c T|| 0 A A B B  Sig   P   Sig   P  2 10 BSV [P2PKH Alice]  5 BSV [P2PKH Bob]

TABLE 4 r, 2 Refund transaction T r, 2 T Version 1 nLockTime r 2 s In-count 1 Out-count 2 Input List Output list Unlocking Sequence Locking Outpoint script no. Value Script c T|| 0 A A B B  Sig   P   Sig   P  3  5 BSV [P2PKH Alice] 10 BSV [P2PKH Bob]

Note that each successive refund transaction created has a lower nLockTime than that of the previous refund transaction and a higher sequence number:

S <S r,i+1 r,i

r,i r,i-1 r,0 103 106 103 103 106 106 a a b If a party refuses to sign any Tthen the aggrieved party may simply submit the T. In the worst-case scenario, Alicesigns Tand submits it to the networkreclaiming all her funds (after nLockTime has expired). The final refund transaction constructed represents the net sum of funds being transferred from Aliceto Bob. This transaction is submitted to the network. The refund transaction that is submitted to the blockchain networkis referred to herein as the settlement transaction.

303 301 302 301 302 302 301 4 FIG. 5 FIG. Embodiments of the present disclosure provide an intermediaryfor facilitating payments between multiple first partiesand a second party. In some embodiments, as shown in, the multiple first partiesare considered as payers and the second partyis considered as a payee. In other embodiments, as shown in, the second partyis considered as the payer and the multiple first partiesand considered as payees.

4 FIG. 1 2 FIGS.and 400 303 301 302 301 303 103 103 400 301 302 301 a b illustrates an example systemin which an intermediaryestablishes multiple payment channels, one per first party, and forwards a payment to a second party. Each first party, the intermediary, and the second party may be configured to perform any of the actions described above as being performed by Aliceand/or Bobwith reference to. The systemmay comprise any number n of first parties. In these embodiments, the second partymay supply, to each first party, respective goods and/or services in return for payment.

303 301 301 301 301 301 303 303 150 The intermediaryestablishes a respective payment channel with each first party, i.e. one per first party. Establishing a respective payment channel comprises obtaining a respective channel opening transaction. A channel opening transaction may also be referred to as an initial transaction, or a funding transaction. Each respective channel opening transaction comprises an input signed by the respective first party. That is, the input references an output of a previous transaction, where that output is controlled by (i.e. locked to) a public key owned by the respective first party. Each respective channel opening transaction comprises an output locked to a public key of the respective first partyand a public key of the intermediary(e.g. the output may be a multi-signature output). Unless the context requires otherwise, each reference herein to a party's public key may mean the same public key or a different public key owned by that party. For example, each channel opening transaction may have an output locked to the same public key of the intermediary. The output of each respective channel opening transaction locks a respective maximum value, i.e. an amount of underlying digital asset (e.g. Satoshis) of the blockchain.

303 303 301 The intermediarymay generate one, some or all of the respective channel opening transactions. The intermediarymay receive one, some or all of the respective channel opening transactions from the respective first parties.

303 301 303 301 301 303 The intermediaryand each respective first partyexecute the respective payment channels. This involves, for each respective payment channel, obtaining one or more respective channel closing transactions. A channel closing transaction may also be referred to as a final transaction or a refund transaction. For each payment channel, each of the one or more respective channel closing transactions comprises a respective input that references the output of the respective channel opening transaction used to open that payment channel. The input may be signed by the intermediaryand/or the respective first party. Each of the one or more respective payment channel closing transactions comprises a respective output locked to a public key of the respective first party, and a respective output locked a public key of the intermediary. The output locked to the public key of the first party locks a first amount of the respective maximum value locked by the output of the respective channel opening transaction. Similarly, the output locked to the public key of the intermediary locks a second amount of the respective maximum value locked by the output of the respective channel opening transaction. Together, the first and second amounts are at most equal to the maximum value. As discussed below, the first and second amounts may be less that the maximum value.

303 106 303 106 302 106 For each respective payment channel, the intermediaryuses one of the respective channel closing transactions to close the payment channel by causing that closing channel transaction to be submitted to the blockchain network. The transaction used to close the payment channel is referred to as the final channel closing transaction. The intermediarymay submit the final channel closing transaction to the blockchain network, or the second partymay submit the final channel closing transaction to the blockchain network.

106 303 303 303 302 Once each payment channel is closed, by the respective final channel closing transaction being submitted to the blockchain network, the intermediarygenerates a payment transaction. The payment transaction comprises a respective input that references, for each respective final channel closing transaction, the respective output of that respective final channel closing transaction that is locked to the public key of the intermediary. Each respective input is signed by the intermediary. The payment channel transaction includes an output locked to a public key controlled by the second party.

The payment transaction may include metadata relating to one, some or all of the payments, e.g. an identifier of the respective first party, a payment reference, etc. The channel opening and/or channel closing transactions may also comprise metadata relating to the respective payment of the respective payment channel.

303 In some examples, the intermediarymay deduct a service charge for facilitating the payments. An example of which is shown in below in Tables 8, 9 and 10, which show examples of a channel opening transaction, a channel closing transaction, and a payment transaction, respectively.

5 FIG. 1 2 FIGS.and 500 303 301 301 302 301 303 103 103 500 301 301 302 a b illustrates an example systemin which an intermediaryestablishes multiple payment channels, one per first partyin order to make payments to each first partyon behalf of a second party. Each first party, the intermediary, and the second party may be configured to perform any of the actions described above as being performed by Aliceand/or Bobwith reference to. The systemmay comprise any number n of first parties. In these embodiments, each first partymay supply to the second party, respective goods and/or services in return for payment.

303 302 302 303 301 303 303 150 302 The intermediaryobtains a funding transaction which has been generated by the second party. The funding transaction includes an input signed by the second partyand output locked to a public key controlled by the intermediary. The output locks a total amount equal to at least a plurality of respective maximum values, each maximum value being associated with a maximum payment to a respective first party. The total amount may include a service charge for collection by the intermediary. The intermediarymay obtain the funding transaction from the blockchain, or from the second party.

303 301 301 303 303 301 303 150 The intermediaryestablishes a respective payment channel with each first party, i.e. one per first party. In these embodiments, establishing a respective payment channel comprises obtaining (e.g. generating) a respective channel opening transaction. Each respective channel opening transaction comprises an input signed by the intermediary party. That is, the input references an output of a previous transaction, where that output is controlled by (i.e. locked to) a public key owned by the intermediary party. Each respective channel opening transaction comprises an output locked to a public key of the respective first partyand a public key of the intermediary(e.g. the output may be a multi-signature output). The output of each respective channel opening transaction locks a respective maximum value, i.e. an amount of underlying digital asset (e.g. Satoshis) of the blockchain.

303 301 303 301 301 303 The intermediaryand each respective first partyexecute the respective payment channels. This involves, for each respective payment channel, obtaining one or more respective channel closing transactions. For each payment channel, each of the one or more respective channel closing transactions comprises a respective input that references the output of the respective channel opening transaction used to open that payment channel. The input may be signed by the intermediaryand/or the respective first party. Each of the one or more respective payment channel closing transactions comprises a respective output locked to a public key of the respective first party, and a respective output locked a public key of the intermediary. The output locked to the public key of the first party locks a first amount of the respective maximum value locked by the output of the respective channel opening transaction. Similarly, the output locked to the public key of the intermediary locks a second amount of the respective maximum value locked by the output of the respective channel opening transaction. Together, the first and second amounts are at most equal to the respective maximum value. As discussed below, the first and second amounts may be less that the maximum value.

303 106 303 106 302 106 For each respective payment channel, the intermediaryuses one of the respective channel closing transactions to close the payment channel by causing that closing channel transaction to be submitted to the blockchain network. The transaction used to close the payment channel is referred to as the final channel closing transaction. The intermediarymay submit the final channel closing transaction to the blockchain network, or the respective first partymay submit the final channel closing transaction to the blockchain network.

The funding transaction may include metadata relating to one, some or all of the payments, e.g. an identifier of the respective first party, a payment reference, etc. The channel opening and/or channel closing transactions may also comprise metadata relating to the respective payment of the respective payment channel.

Tables 11, 12 and 13 below illustrate examples of a funding transaction, channel opening transaction and channel closing transaction, respectively.

It will be appreciated that terms used herein such as “funding”, “payment”, “channel opening”, “channel closing”, etc. are merely used as labels for particular transactions.

This section describes an example payment channel aggregator (PCA) according to embodiments of the present disclosure, a system that facilitates the inclusion of an intermediary (I-Ivan) between a pair of parties (A-Alice and B-Bob) who would have previously used a payment channel directly between themselves (Alice and Bob).

3 FIG. 300 301 302 303 303 103 103 303 103 103 303 103 103 a b a b a b. illustrates an example systemfor facilitating payments between a first partyand a second partyusing an intermediate party. For convenience, the first partywill be referred to as Alice, the second party as Boband the intermediate party as Ivan. For one-to-one payments it is assumed that a party Aliceis to pay intermittent payments to Bobfor services or goods. This would have previously been carried out via a payment channel between both parties. However, in the PCA for said scenario, an intermediary (Ivan)is utilised to handle the payments from Aliceto Bob

303 103 103 303 103 303 103 a b a b Ivan, Alice, and Bobcome to an agreement that Ivanwill collect payments from Aliceand then Ivanwould subsequently transfer these funds to Bob(possibly by a specified deadline). 103 303 303 103 303 a a Aliceand Ivancreate a payment channel between themselves, that would be utilised to facilitate intermittent payments to Ivan. This includes the creation of a funding transaction that may refund to Alice(or pay to Ivan) a maximum amount, Max BSV. 150 At the conclusion of Alice's payments ‘the payment channel is closed’ (i.e. the settlement transaction is submitted to the blockchain). 303 103 303 103 103 103 f f i+1 r,i+1 r,i b b a b Ivantransfers the value of the settlement transaction, x, to Bob. (Ivanmay deduct a previously-agreed-upon personal service charge sc before paying xto Bob). Note that, rather than being a flat fee, this service charge may be proportional to the amount that Ivan has been able to collect from Alice(on behalf of Bob). This is in that the service charge scfor refund transaction Twould be greater than the service charge sc; for refund transaction T. 103 b To prevent the increased service charge from reducing the payment to Bob, an additional input may be added to the refund transaction that has the responsibility of funding the service charges.

103 103 303 a b For the payment channel utilised, an example of the funding transaction Tc and one of the refund transactions Tri are shown in Table 5 and Table 6 respectively. OP_RETURN outputs may be included in both transactions to store metadata related to agreements between Alice, Bob, and Ivan. This metadata may include data related to the transaction. E.g., If a Netflix subscription, the metadata may include a hash of a licensing agreement, a subscription ID, a start date, an end data, and a specific tier of service requested, etc.

TABLE 5 Funding Transaction PCA One-to-One c T Version 1 nLockTime 0 In-count 1 Out-count 2 Input List Output list Unlocking Sequence Locking Outpoint script no. Value Script Alice's input A A  Sig   P  4294967295 Max [2-2 multisig Alice Ivan] OP_FALSE OP_RETURN Meta

TABLE 6 Refund Transaction. PCA One-to-One r, i T Version 1 nLockTime r i s In-count 1 Out-count 3 Input List Output list Unlocking Sequence Locking Outpoint script no. Value Script c T|| 0 A A I I  Sig   P   Sig   P  i i i Max − (x+ sc) [P2PKH Alice] i i x+ sc [P2PKH Ivan] 0 OP_FALSE OP_RETURN Meta

303 103 b payment r,k When Ivanis to pay Bob, this may be done using a P2PKH transaction (T) as shown in Table 7. This transaction spends Ivan's UTXO of the settlement Ttransaction. Metadata may be included in the payment transaction that would link the payment to Alice's subscription. This may include the previously mentioned metadata like subscription ID plus additional information like final iteration signed (e.g., paid till June 2022), hash of the settlement refund transaction, etc.

TABLE 7 Payment from Ivan to Bob for all funds received up to iteration k Payment T Version 1 nLockTime 0 In-count 1 Out-count 2 Input List Output list Unlocking Sequence Locking Outpoint script no. Value Script r, f T|| 1 I I  Sig   P  4294967295 f Max − (x+ [P2PKH Bob] f sc) 0 OP_FALSE OP_RETURN Meta

4 FIG. 400 301 301 301 302 303 303 103 103 303 103 a b n a b b illustrates an example systemfor facilitating payments between multiple first parties,, . . ., and a second partyusing an intermediate party. For convenience, each first partywill be referred to as Alice, the second party as Boband the intermediate party as Ivan. For many-to-one it is assumed that there are multiple Alices {Alice; |j∈[1, n]} who are to pay intermittent payments to Bobfor services or goods. (e.g. multiple subscribers needing to pay monthly payments to Netflix).

j This would have previously been carried out, for each subscriber Alice, via their individual respective payment channel between each Alice and Bob (e.g. Netflix).

303 However, using the PCA, an intermediary, Ivan, is utilised to manage these payments.

303 150 303 103 b. This intermediarywill accept the iterative payments for each channel then eventually the settlement transaction is submitted to the blockchain. The combined value of these n settlement transactions are then forwarded, by Ivan, to Bob

103 303 303 303 103 b b Each Alice; comes to their agreement with Boband Ivan; this is an agreement that Ivanwill collect payments from Alice; and then Ivanwould subsequently transfer the value of the respective settlement transactions to Bob(possibly by a specified deadline). j 303 303 Aliceand Ivancreate a payment channel between themselves; these would be utilised as a regular payment channel, to facilitate intermittent payments to Ivan. At the conclusion of Alice's payments ‘the payment channel is closed’. 303 After the n channels are closed, Ivantransfers the combined value of the n settlement transactions

103 b to Bob. This may be in the form of one or more payment transactions.

103 303 103 b b close close r,i+1 r,i Assuming a single final payment to Bobfrom Ivan(transaction example shown in Table 8) and an agreed-upon deadline, s, for Ivan's payment to Bob, this requires that the latest nLockTime value for any of the n payment channels be less than s. Note that the “latest locktime” of payment channel is the nLockTime of the first iteration of a refund transaction of the channel as S<S. As such the latest locktime of the n payment channels would be a first iteration refund transactions of these channels that has the latest time.

303 For the payment channel utilised for an Alice, and Ivanan example of the funding transaction

and one of the refund transactions

is shown below in Tables 9 and 10.

TABLE 8 Funding Transaction PCA. Many-to-One. Trusted Version 1 nLockTime 0 In-count 1 Out-count 2 Input List Output list Unlocking Outpoint script Seq. no. Value Locking Script Alice's A j  A j   Sig  P 4294967295 j MaxBSV [2-2 multisig input j AliceIvan] OP_FALSE OP_RETURN Meta

TABLE 9 Refund Transaction. PCA. Many-to-One. Trusted Version 1 nLockTime r k,i S In-count 1 Out-count 2 Input List Output list Seq. Outpoint Unlocking script no. Value Locking Script c T|| 0 A j  A j   Sig  P i j [P2PKH Alice] I  I   Sig  P [P2PKH Ivan] OP_FALSE OP_RETURN Meta

303 303 After all the settlement transactions for all the payment channels have been received by Ivan, he can then proceed to pay the combined sums to Bob (e.g. Netflix). He makes this payment by spending the appropriate UTXOs of the settlement refund transactions. An example of this payment to Bob from Ivan is shown in Table 10. The metadata in this transaction may include details that link the payment to the settlement refund transactions between the Alice's and Ivan. More specifically it may include the hash of the settlement transactions as well as the details of the individual ‘subscriptions’.

TABKE 10 j Payment from Ivan to Bob for all funds from all Alices after their settlements. Payment T Version 1 nLockTime 0 In-count n Out-count 2 Input List Output list Un- Se- locking quence Outpoint script no. Value Locking Script I  I   Sig P 0×ffffffff [P2PKH Bob] I   Sig 0 OP_FALSE I   P OP_RETURN Meta . . . . . . I   Sig I   P

5 FIG. 500 302 301 301 301 303 302 103 103 303 103 103 303 a b n a b a a k illustrates an example systemfor facilitating payments between a second partyand multiple first parties,, . . . ,using an intermediate party(where n can be any number). For convenience, the second partywill be referred to as Alice, each first party as an instance of Boband the intermediate party as Ivan. For one-to-many it is assumed that there are multiple Bobs {Bob|k∈[1, m]} and a single Alice. An example of this would be one individual who subscribes to multiple services. Consider an Alicewho subscribes to a subscription service such as Netflix, Amazon Prime, Disney+, etc. Rather than personally dealing with the multiple service providers, Alicepays a lump sum to an intermediary, Ivan, who then handles the payments to each provider.

303 303 103 a Using the PCA technique for said scenario, an intermediary, Ivan, is again utilised to manage these payments. This intermediarywill accept the lump-sum payment from Alicethen establish m payment channels between the set of Bobs.

103 303 a Alicediscusses with Ivanthe criteria for when to submit a settlement transaction (i.e. no longer increase the amount being paid to Bob in a refund transaction). 103 303 a Alicepays to Ivana service charge sc+the sum of the different maximums that may be paid per channel.

303 k k Ivancreates the m payment channels between himself and each Bob. These would each be utilised as a regular payment channel, to facilitate intermittent payments to the corresponding Bob. 303 k Each payment channel is closed after Ivanand the corresponding Bobcome to an agreement on the final refund transaction (settlement transaction).

k For the payment channel Ivan→Boban example of the funding transaction

and one of the refund transactions

are shown below.

TABLE 11 Funding Transaction. PCA. One-to-Many Version 1 nLockTime 0 In-count 1 Out-count 2 Input List Output list Unlocking Outpoint script Sequence no. Value Locking Script Ivan's I   Sig 0×ffffffff k MaxBSV [2-2 multisig Ivan input   I  P k Bob] OP_FALSE OP_RETURN Meta

TABLE 12 Refund Transaction. PCA. One-to-Many Version 1 nLockTime r,k j s In-count 1 Out-count 3 Input List Output list Out- Sequence point Unlocking script no. Value Locking Script Tc || 0 I  I   Sig  P j 0×0000000k [P2PKH Ivan] B k  B k   Sig  P k [P2PKH Bob] OP_FALSE OP_RETURN Meta

103 a Alicewould have funded the intermediary Ivan with a regular P2PKH transaction such as shown in Table 13. Note that the service charge sc is included in the funding.

TABLE 13 Transaction to fund all Payment channels for All. PCA. One-to-Many Funding T Version 1 nLockTime 0 In-count 1 Out-count 1 Input List Output list Unlocking Sequence Outpoint script no. Value Locking Script A  A   Sig  P 0×ffffffff [P2PKH Ivan]

Other variants or use cases of the disclosed techniques may become apparent to the person skilled in the art once given the disclosure herein. The scope of the disclosure is not limited by the described embodiments but only by the accompanying claims.

106 150 104 150 106 150 104 106 150 104 150 106 104 For instance, some embodiments above have been described in terms of a bitcoin network, bitcoin blockchainand bitcoin nodes. However it will be appreciated that the bitcoin blockchain is one particular example of a blockchainand the above description may apply generally to any blockchain. That is, the present invention is in by no way limited to the bitcoin blockchain. More generally, any reference above to bitcoin network, bitcoin blockchainand bitcoin nodesmay be replaced with reference to a blockchain network, blockchainand blockchain noderespectively. The blockchain, blockchain network and/or blockchain nodes may share some or all of the described properties of the bitcoin blockchain, bitcoin networkand bitcoin nodesas described above.

106 104 151 150 106 In preferred embodiments of the invention, the blockchain networkis the bitcoin network and bitcoin nodesperform at least all of the described functions of creating, publishing, propagating and storing blocksof the blockchain. It is not excluded that there may be other network entities (or network elements) that only perform one or some but not all of these functions. That is, a network entity may perform the function of propagating and/or storing blocks without creating and publishing blocks (recall that these entities are not considered nodes of the preferred bitcoin network).

106 151 150 151 151 In other embodiments of the invention, the blockchain networkmay not be the bitcoin network. In these embodiments, it is not excluded that a node may perform at least one or some but not all of the functions of creating, publishing, propagating and storing blocksof the blockchain. For instance, on those other blockchain networks a “node” may be used to refer to a network entity that is configured to create and publish blocksbut not store and/or propagate those blocksto other nodes.

104 104 Even more generally, any reference to the term “bitcoin node”above may be replaced with the term “network entity” or “network element”, wherein such an entity/element is configured to perform some or all of the roles of creating, publishing, propagating and storing blocks. The functions of such a network entity/element may be implemented in hardware in the same way described above with reference to a blockchain node.

104 151 Some embodiments have been described in terms of the blockchain network implementing a proof-of-work consensus mechanism to secure the underlying blockchain. However proof-of-work is just one type of consensus mechanism and in general embodiments may use any type of suitable consensus mechanism such as, for example, proof-of-stake, delegated proof-of-stake, proof-of-capacity, or proof-of-elapsed time. As a particular example, proof-of-stake uses a randomized process to determine which blockchain nodeis given the opportunity to produce the next block. The chosen node is often referred to as a validator. Blockchain nodes can lock up their tokens for a certain time in order to have the chance of becoming a validator. Generally, the node who locks the biggest stake for the longest period of time has the best chance of becoming the next validator.

It will be appreciated that the above embodiments have been described by way of example only. More generally there may be provided a method, apparatus or program in accordance with any one or more of the following Statements.

obtaining a respective channel opening transaction, the respective channel opening transaction comprises a respective input signed by the respective first party, and a respective output locked to a respective public key of the respective first party and a public key of the intermediate party, wherein the respective output locks a respective maximum value; obtaining one or more respective channel closing transactions including a respective final channel closing transaction, wherein the respective final channel closing transaction comprises a respective input that references the respective output of the respective channel opening transaction and comprises a respective signature of the respective first party and a signature of the intermediate party, and a respective first output locked to a respective public key of the respective first party and a respective second output locked to a public key of the intermediate party, wherein the respective first output locks a respective first amount of the respective maximum value, and wherein the respective second output locks a respective second amount of the respective maximum value; and executing a respective payment channel between each respective first party and the intermediate party, wherein executing the respective payment channel comprises: generating a payment transaction, wherein the payment transaction comprises a plurality of respective inputs, each respective input references a respective second output of a respective final channel closing transaction and comprising a signature of the intermediate party, and an output locked to a public key of the second party, wherein the output locks a value based on a total of the respective second amounts locked by the respective second outputs. Statement 1. A computer-implemented method of facilitating a plurality of respective payments between a plurality of respective first parties and a second party, wherein the method is performed by an intermediate party and comprises:

Statement 2. The method of statement 1, wherein the payment transaction comprises metadata relating to one, some or all of the respective payments.

Statement 3. The method of statement 1 or statement 2, wherein for each respective payment channel, the respective first amount of the respective maximum value is equal to the respective maximum value minus a third amount of the respective maximum value, minus a service charge value, and the respective second amount of the respective maximum value is equal to the third amount of the respective maximum value plus the service charge value.

obtaining a funding transaction generated by the second party, wherein the funding transaction comprises an input comprising a signature of the second party, and an output locked to a public key of the intermediate party, wherein the output locks an amount at least equal to a total of a plurality of respective maximum values; and obtaining a respective channel opening transaction, the respective channel opening transaction comprises a respective input signed by the intermediate party, and a respective output locked to a respective public key of the respective first party and a public key of the intermediate party, wherein the respective output locks a respective maximum value; obtaining one or more respective channel closing transactions including a respective final channel closing transaction, wherein the respective final channel closing transaction comprises a respective input that references the respective output of the respective channel opening transaction and comprises a respective signature of the respective first party and a signature of the intermediate party, and a respective first output locked to a respective public key of the respective first party and a respective second output locked to a public key of the intermediate party, wherein the respective first output locks a respective first amount of the respective maximum value, and wherein the respective second output locks a respective second amount of the respective maximum value. executing a respective payment channel between each respective first party and the intermediate party, wherein executing the respective payment channel comprises: Statement 4. A computer-implemented method of facilitating a plurality of respective payments between a plurality of respective first parties and a second party, wherein the method is performed by an intermediate party and comprises:

Statement 5. The method of statement 4, wherein the funding transaction comprises metadata relating to one, some or all of the respective payments.

Statement 6. The method of statement 4 or statement 5, wherein the output of the funding transaction locks an amount equal to a total of the respective maximum values plus a service charge.

Statement 7. The method of any preceding, wherein for one, some or all of the respective payment channels, the respective channel opening transaction and/or the respective final channel closing transaction comprises metadata relating to the respective payment.

Statement 8. The method of any preceding statement, wherein the respective output of the respective channel opening transaction and/or the respective output of the respective channel closing transaction comprises a multi-signature locking script.

Statement 9. The method of statement 1 or any statement dependent thereon, wherein the second party provides respective goods and/or respective services to the respective first party in return for the respective payment.

Statement 10. The method of statement 4 or any statement dependent thereon, wherein each respective first parties provide respective goods and/or respective services to the second party in return for the respective payment.

memory comprising one or more memory units; and processing apparatus comprising one or more processing units, wherein the memory stores code arranged to run on the processing apparatus, the code being configured so as when on the processing apparatus to perform the method of any of statements 1 to 10. Statement 11. Computer equipment comprising:

Statement 12. A computer program embodied on computer-readable storage and configured so as, when run on one or more processors, to perform the method of any of statements 1 to 10.

According to another aspect disclosed herein, there may be provided a method comprising the actions of the intermediate party and one or both of: i) the plurality of first parties and ii) the second party.

According to another aspect disclosed herein, there may be provided a system comprising the computer equipment of i) the plurality of first parties and ii) the second party.